Nifty prediction for February 27: Inverted Hammer pattern hints at possible bounce

The Nifty 50 continues its downward trend, closing at 22,547.55 on February 25 after slipping 5.80 points (0.03%). This marks the sixth consecutive losing session, with the index dropping over 400 points (1.75%) in total.

Despite the decline, 19 stocks closed in the green, including Airtel and M&M, which gained over 2%, while Bajaj Finance and Nestle India rose more than 1% each. Titan, Maruti, Adani Ports, Bajaj Finserv, Adani Enterprises, ICICI Bank, and HUL also saw gains.

However, Dr. Reddy’s and Hindalco led the losers, falling over 3%, followed by Trent, Hero MotoCorp, Sun Pharma, Tech Mahindra, Power Grid, TCS, Wipro, and Cipla.

Among sectors, Nifty Metal, Oil & Gas, Realty, and PSU Bank dropped over 1% each, while Nifty Bank fell 0.09% to 48,608.35. The Nifty Midcap 100 and Smallcap 100 indices also extended their losing streak for the third day, slipping 0.62% and 0.44%, respectively.

Market Sentiment: Bearish with Key Support at 22,450

Experts indicate that Nifty 50 remains under bearish control, struggling to break above the 21EMA on the hourly chart, suggesting continued selling pressure.

Rupak De, Senior Technical Analyst at LKP Securities, highlights 22,500 as a key support level. A breach below this may lead to further downside, while resistance lies at 22,650 and 22,750-22,800, where selling pressure could emerge.

Nandish Shah, Deputy Vice President at HDFC Securities, points out that 22,450 is a critical support, derived from the 76.4% retracement of the uptrend (from 21,281 in June 2024 to 26,277 in September 2024). Resistance is expected in the 22,700-22,800 zone.

Chart Analysis: Inverted Hammer Pattern Signals Possible Bounce

Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, notes that Tuesday’s session formed an inverted hammer candle pattern on the daily chart, which, after a downtrend, may indicate a potential recovery—but confirmation is needed.

He adds that slowing selling momentum near the 22,450 support (20-month EMA) could trigger an upside bounce in the short term.

Support & Resistance Levels to Watch

Osho Krishnan, Sr. Analyst at Angel One, warns that Nifty’s technical structure remains bearish. He emphasizes that the 22,500-22,400 support zone is crucial, and any movement in this range should be watched closely.

A bearish gap at 22,670-22,720 may act as a strong resistance, making it difficult for the market to recover ahead of the expiry day.

While Nifty 50 remains under pressure, the inverted hammer pattern and support near 22,450 hint at a potential short-term bounce. However, resistance levels at 22,650-22,800 could limit any recovery. Traders should stay cautious and watch key levels closely.